Inflection points and industry change: Was Andy Grove right after all?

Fred Phillips,G George Hwang,Pornpimol Limprayoon

doi:10.15415/jtmge.2016.71001

Abstract

We examine whether the ‘strategic inflection points’ described by former Intel CEO Andy Grove correspond to mathematical inflection points in the product/technology life cycle. We find one sense in which they do and two senses in which they do not. This leads to a mapping of colloquial uses of inflection point, tipping point, volatility, chaos, and turbulence against the scientific definitions of these terms. The mapping should be of use to researchers and educators, and also suggests to managers that the possibility of foresight and control in technology-dependent industries is more sharply limited than generally believed. The paper highlights implications for organizational sustainability and offers possible coping mechanisms for managers and directions for educators and researchers.

Highlights

Calculus students, who know the inflection point in an s-shaped growth curve is where things start to slow down, would have been confused by Andy Grove’s use of ‘strategic inflection point’ to mean ‘the nightmare moment... when massive change occurs and a company must, virtually overnight, adapt or fall by the wayside’ (Phillips, 2007).Two points jump from the inset above: First, there is confusion about the term ‘inflection point,’ and second, such points – at least in Grove’s definition – are substantial threats to the enterprise’s sustainability
In the sections that follow, we explore Grove’s idea of inflection points, comparing them to ‘tipping points’ and to mathematical inflection points in the product/technology life cycle, and examining their relationship to product revitalization and technological substitution
The scanner survey firms were experiencing a ‘hype curve’ – the interrupted growth curve so frequently seen in technology industries – while the same events produced a strategic inflection point for Market Research Corporation of America (MRCA)

Summary

Introduction

Calculus students, who know the inflection point in an s-shaped growth curve is where things start to slow down, would have been confused by Andy Grove’s use of ‘strategic inflection point’ to mean ‘the nightmare moment... when massive change occurs and a company must, virtually overnight, adapt or fall by the wayside’ (Phillips, 2007).Two points jump from the inset above: First, there is confusion about the term ‘inflection point,’ and second, such points – at least in Grove’s definition – are substantial threats to the enterprise’s sustainability. Grove suggested that the IT (information technology) industry was on the cusp of a new inflection point in 1996. Modis and Debecker (1992) showed the graph (Figure 5) of bituminous coal production in the United States, with successive logistic curves fitted, representing the opening of a new market niche for the mineral just before mid-century.

Results

Conclusion